The DOJ Arrests Money Transmitter Owner for Money Laundering

The US Department of Justice has arrested one of the owners and operators of three unlicensed money transmitting businesses, Ferhan Patel, for the charge of conspiracy to launder money. Patel’s older brother and co-owner of these businesses, Firoz Patel, has yet to be located but both brothers face a maximum prison sentence of 25 years if convicted.

The Patel brothers founded Payza.com along with AlertPay.com and Egopay.com which have processed transactions totaling more than $250 million across the United States. Payza allows its users to make payments and transfer money through the internet and also allows the use of four cryptocurrencies to be exchanged including Bitcoin, Ethereum, Ripple and Dash. The business mainly serves Asia, the Middle East, Europe, and South America, but was founded in the UK.

The company continued to run their illegal businesses, despite receiving multiple cease and desist letters from various states and was told that operating their businesses without the state licenses was a crime. Firoz Patel is also listed as the President of another company named MH Pillas Ltd, which is also being charged with operating an unlicensed money transmitting business.

According to the DOJ’s statement, the illegal activities that Payza’s customers were involved in that generated the funds transmitted through the sites began in 2012 and included illegal activities such as Ponzi schemes, Pyramid schemes and a child pornography site. The brothers have been charged with one count of conspiracy to operate an unlicensed money transmitting business and to violate anti-money laundering program requirements, one count of a money laundering conspiracy and one count of operating an unlicensed money transmitting business in the District of Columbia.

Ferhan Patel was arrested in Detroit on March 18, where he is awaiting transfer to the District of Columbia. During Ferhan Patel’s hearing held at a U.S. District Court in Michigan, he waived his right to challenge the allegation and his right to a bail hearing but asked that the judge offer these options to him again when he is transferred to D.C.